Wall Street falls as manufacturing data disappoints

By Ryan Vlastelica

NEW YORK (Reuters) - U.S. stocks fell on Monday as disappointing reads on consumer spending and the manufacturing sector added to recent concerns that economic data was pointing to slowing conditions.

Trading was volatile, with the S&P 500 moving between positive and negative territory. Energy names were stronger on the day, lifted by both higher oil prices and better-than-expected results at Exxon Mobil, but otherwise losses were widespread.

Wall Street has been in a downtrend lately, with January the worst month for the Dow and S&P 500 in a year. The S&P fell more than 1 percent in three of the past four sessions, while market swings have gotten larger of late. Over the past 14 days the S&P has moved an average of 30 points between its high and low of the session. On January 9, that average was under 20.

"Fundamentals still look strong, but earnings are really coming in under expectations, which is creating a general concern that is leading to heavy volatility," said James Liu, global market strategist for JPMorgan Funds in Chicago. "We got used to good earnings growth and data and now we're facing the first real test of that sentiment not always being true."

The Institute for Supply Management show that the pace of growth in the U.S. manufacturing sector slowed more than expected in January.

U.S. consumer spending recorded its biggest decline since late 2009 in December, with cheaper gas not translating to higher activity. The Commerce Department said consumer spending dropped 0.3 percent after a downwardly revised 0.5 percent increase in November. It was the largest drop since September 2009.

The data weighed on the consumer discretionary sector, which fell 1.1 percent.

"The big question is why we're not seeing a stronger consumer. It may take a while for the impact of lower oil to work its way through the system," Liu said.

The energy sector rose 0.9 percent while U.S. crude futures rose 0.1 percent. Oil earlier jumped as much as 4.8 percent, a rise that suggested the beaten-down commodity was in a strong uptrend following a jump of 8.3 percent on Friday. Oil remains down more than 50 percent from a recent high in June.

Exxon Mobil Corp reported a profit drop of 21 percent, though that decline was less than expected. Shares of the Dow component rose 1 percent to $87.87.

At 10:07 a.m. (1507 GMT), the Dow Jones industrial average fell 108.9 points, or 0.63 percent, to 17,056.05, the S&P 500 lost 11.4 points, or 0.57 percent, to 1,983.59 and the Nasdaq Composite dropped 47.36 points, or 1.02 percent, to 4,587.88.

Declining issues outnumbered advancing ones on the NYSE by 1,605 to 1,280, for a 1.25-to-1 ratio; on the Nasdaq, 1,552 issues fell and 880 advanced for a 1.76-to-1 ratio favoring decliners.

The benchmark S&P 500 was posting no new 52-week highs and 5 new lows; the Nasdaq Composite was recording 10 new highs and 43 new lows.

(Editing by Nick Zieminski)